GEO GROUP INC/THE (GEO) Stock Fundamental Analysis
USA - NYSE:GEO - US36162J1060 - Common Stock
21.98 USD
+0.37 (+1.71%)
22.09 USD
+0.11 (+0.5%)
Taking everything into account, GEO scores 3 out of 10 in our fundamental rating. GEO was compared to 84 industry peers in the Commercial Services & Supplies industry. There are concerns on the financial health of GEO while its profitability can be described as average. GEO has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year GEO was profitable.
In the past year GEO had a positive cash flow from operations.
In the past 5 years GEO has always been profitable.
GEO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GEO has a Return On Assets (2.45%) which is in line with its industry peers.
GEO's Return On Equity of 6.49% is in line compared to the rest of the industry. GEO outperforms 59.52% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.85%, GEO is in line with its industry, outperforming 59.52% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for GEO is below the industry average of 10.60%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.45% | ||
| ROE | 6.49% | ||
| ROIC | 6.85% |
ROA(3y)2.34%
ROA(5y)2.22%
ROE(3y)7.12%
ROE(5y)8.19%
ROIC(3y)7.94%
ROIC(5y)6.71%
1.3 Margins
Looking at the Profit Margin, with a value of 3.66%, GEO is in line with its industry, outperforming 59.52% of the companies in the same industry.
In the last couple of years the Profit Margin of GEO has declined.
GEO has a better Operating Margin (11.55%) than 77.38% of its industry peers.
In the last couple of years the Operating Margin of GEO has remained more or less at the same level.
The Gross Margin of GEO (25.84%) is worse than 60.71% of its industry peers.
GEO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.55% | ||
| PM (TTM) | 3.66% | ||
| GM | 25.84% |
OM growth 3Y0.06%
OM growth 5Y1.08%
PM growth 3Y-26.63%
PM growth 5Y-28.78%
GM growth 3Y-1.24%
GM growth 5Y1.46%
2. Health
2.1 Basic Checks
GEO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, GEO has more shares outstanding
GEO has more shares outstanding than it did 5 years ago.
GEO has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.76, we must say that GEO is in the distress zone and has some risk of bankruptcy.
GEO has a Altman-Z score (1.76) which is in line with its industry peers.
The Debt to FCF ratio of GEO is 12.95, which is on the high side as it means it would take GEO, 12.95 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 12.95, GEO perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
A Debt/Equity ratio of 1.07 is on the high side and indicates that GEO has dependencies on debt financing.
GEO has a worse Debt to Equity ratio (1.07) than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 12.95 | ||
| Altman-Z | 1.76 |
ROIC/WACC0.73
WACC9.41%
2.3 Liquidity
GEO has a Current Ratio of 0.90. This is a bad value and indicates that GEO is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of GEO (0.90) is worse than 79.76% of its industry peers.
A Quick Ratio of 0.90 indicates that GEO may have some problems paying its short term obligations.
With a Quick ratio value of 0.90, GEO is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
GEO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -21.35%.
Measured over the past years, GEO shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -30.77% on average per year.
The Revenue for GEO has decreased by -19.08% in the past year. This is quite bad
The Revenue has been decreasing by -0.44% on average over the past years.
EPS 1Y (TTM)-21.35%
EPS 3Y-19.54%
EPS 5Y-30.77%
EPS Q2Q%-4.35%
Revenue 1Y (TTM)-19.08%
Revenue growth 3Y2.41%
Revenue growth 5Y-0.44%
Sales Q2Q%4.77%
3.2 Future
Based on estimates for the next years, GEO will show a very strong growth in Earnings Per Share. The EPS will grow by 58.01% on average per year.
GEO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.57% yearly.
EPS Next Y22.82%
EPS Next 2Y58.01%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year6.78%
Revenue Next 2Y12.57%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 31.40 indicates a quite expensive valuation of GEO.
GEO's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.41. GEO is around the same levels.
GEO is valuated reasonably with a Price/Forward Earnings ratio of 11.74.
Based on the Price/Forward Earnings ratio, GEO is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
GEO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.4 | ||
| Fwd PE | 11.74 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GEO is valued a bit cheaper than the industry average as 64.29% of the companies are valued more expensively.
GEO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. GEO is cheaper than 70.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.74 | ||
| EV/EBITDA | 11.51 |
4.3 Compensation for Growth
GEO's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as GEO's earnings are expected to grow with 58.01% in the coming years.
PEG (NY)1.38
PEG (5Y)N/A
EPS Next 2Y58.01%
EPS Next 3YN/A
5. Dividend
5.1 Amount
GEO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
21.98
+0.37 (+1.71%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners91.03%
Inst Owner Change0.68%
Ins Owners1.72%
Ins Owner Change-6.44%
Market Cap3.11B
Analysts82.22
Price Target38.25 (74.02%)
Short Float %6.78%
Short Ratio2.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.78%
Min EPS beat(2)-22.99%
Max EPS beat(2)32.55%
EPS beat(4)1
Avg EPS beat(4)-12.58%
Min EPS beat(4)-44.81%
Max EPS beat(4)32.55%
EPS beat(8)3
Avg EPS beat(8)5.28%
EPS beat(12)4
Avg EPS beat(12)0.77%
EPS beat(16)8
Avg EPS beat(16)8.33%
Revenue beat(2)1
Avg Revenue beat(2)-0.39%
Min Revenue beat(2)-2.15%
Max Revenue beat(2)1.38%
Revenue beat(4)1
Avg Revenue beat(4)-1.09%
Min Revenue beat(4)-2.63%
Max Revenue beat(4)1.38%
Revenue beat(8)3
Avg Revenue beat(8)-0.63%
Revenue beat(12)5
Avg Revenue beat(12)-0.27%
Revenue beat(16)7
Avg Revenue beat(16)-0.1%
PT rev (1m)-5.86%
PT rev (3m)-10.29%
EPS NQ rev (1m)-0.55%
EPS NQ rev (3m)-4.72%
EPS NY rev (1m)-3.87%
EPS NY rev (3m)-8.06%
Revenue NQ rev (1m)0.38%
Revenue NQ rev (3m)-0.11%
Revenue NY rev (1m)-0.34%
Revenue NY rev (3m)-0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.4 | ||
| Fwd PE | 11.74 | ||
| P/S | 1.27 | ||
| P/FCF | 23.74 | ||
| P/OCF | 13.06 | ||
| P/B | 2.25 | ||
| P/tB | 6.16 | ||
| EV/EBITDA | 11.51 |
EPS(TTM)0.7
EY3.18%
EPS(NY)1.87
Fwd EY8.52%
FCF(TTM)0.93
FCFY4.21%
OCF(TTM)1.68
OCFY7.65%
SpS17.32
BVpS9.77
TBVpS3.57
PEG (NY)1.38
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.45% | ||
| ROE | 6.49% | ||
| ROCE | 9.14% | ||
| ROIC | 6.85% | ||
| ROICexc | 7% | ||
| ROICexgc | 9.86% | ||
| OM | 11.55% | ||
| PM (TTM) | 3.66% | ||
| GM | 25.84% | ||
| FCFM | 5.34% |
ROA(3y)2.34%
ROA(5y)2.22%
ROE(3y)7.12%
ROE(5y)8.19%
ROIC(3y)7.94%
ROIC(5y)6.71%
ROICexc(3y)8.16%
ROICexc(5y)7.05%
ROICexgc(3y)11.32%
ROICexgc(5y)9.67%
ROCE(3y)10.59%
ROCE(5y)8.94%
ROICexcg growth 3Y8%
ROICexcg growth 5Y5.13%
ROICexc growth 3Y6.92%
ROICexc growth 5Y4.53%
OM growth 3Y0.06%
OM growth 5Y1.08%
PM growth 3Y-26.63%
PM growth 5Y-28.78%
GM growth 3Y-1.24%
GM growth 5Y1.46%
F-Score5
Asset Turnover0.67
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 12.95 | ||
| Debt/EBITDA | 3.58 | ||
| Cap/Depr | 83.4% | ||
| Cap/Sales | 4.37% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 57.84% | ||
| Profit Quality | 146.04% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 1.76 |
F-Score5
WACC9.41%
ROIC/WACC0.73
Cap/Depr(3y)62.7%
Cap/Depr(5y)64.04%
Cap/Sales(3y)3.35%
Cap/Sales(5y)3.55%
Profit Quality(3y)310.14%
Profit Quality(5y)305.57%
High Growth Momentum
Growth
EPS 1Y (TTM)-21.35%
EPS 3Y-19.54%
EPS 5Y-30.77%
EPS Q2Q%-4.35%
EPS Next Y22.82%
EPS Next 2Y58.01%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-19.08%
Revenue growth 3Y2.41%
Revenue growth 5Y-0.44%
Sales Q2Q%4.77%
Revenue Next Year6.78%
Revenue Next 2Y12.57%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-30.35%
EBIT growth 3Y2.47%
EBIT growth 5Y0.63%
EBIT Next Year49.51%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-13.75%
FCF growth 3Y-8.46%
FCF growth 5Y-5.84%
OCF growth 1Y0.3%
OCF growth 3Y-5.01%
OCF growth 5Y-6.45%